Jebara v The State of Western Australia
[2016] WADC 122
•17 AUGUST 2016
JEBARA -v- THE STATE OF WESTERN AUSTRALIA [2016] WADC 122
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2016] WADC 122 | |
| Case No: | POC:1/2013 | 27 JULY 2016 | |
| Coram: | PARRY DCJ | 17/08/16 | |
| PERTH | |||
| 11 | Judgment Part: | 1 of 1 | |
| Result: | Order dismissing first plaintiff's objection to confiscation of frozen property by freezing notice No WAPFN 130016 was not made ex parte Application under O 58 r 23 of the Rules of the Supreme Court 1971 (WA) to set aside order dismissed | ||
| PDF Version |
| Parties: | REDWAN JEBARA HUSSEIN JEBARA ALI JEBARA RUBA JEBARA RABHA JEBARA THE STATE OF WESTERN AUSTRALIA |
Catchwords: | Practice and procedure Application to set aside order on basis that order made ex parte Criminal Property Confiscation Act 2000 (WA) Objection to confiscation of frozen property by freezing notice First plaintiff declared bankrupt First plaintiff's trustee in bankruptcy and defendant filed and obtained consent order that first plaintiff's objection to confiscation of frozen property be dismissed Challenge by first plaintiff to consent order Whether consent order made ex parte Whether first plaintiff's trustee in bankruptcy can elect to discontinue proceeding involving objection to confiscation of frozen property |
Legislation: | Bankruptcy Act 1966 (Cth) s 60, s 60(1)(b), s 60(2), s 60(3), s 60(4A), s 60(5) Criminal Property Confiscation Act 2000 (WA) s 7(1), s 7(2), s 79, s 102(1) District Court Rules 2005 (WA) r 6(1) Rules of the Supreme Court 1971 (WA) O 43, r 16, O 58 r 23 |
Case References: | City of Kwinana v Lamont [2014] WASCA 112 Kotrlik v Eisner [1958] VR 55 Redwin Industries Pty Ltd v Feetsafe Pty Ltd [2002] VSC 427 Yap v Bailiff [2006] WADC 119 |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- and IN THE MATTER of the APPLICATION FOR A FREEZING NOTICE FOR PROPERTY No WAPFN 130016
- First Plaintiff
HUSSEIN JEBARA
Second Plaintiff
ALI JEBARA
Third Plaintiff
RUBA JEBARA
Fourth Plaintiff
RABHA JEBARA
Fifth Plaintiff
AND
THE STATE OF WESTERN AUSTRALIA
Defendant
Catchwords:
Practice and procedure - Application to set aside order on basis that order made ex parte - Criminal Property Confiscation Act 2000 (WA) - Objection to confiscation of frozen property by freezing notice - First plaintiff declared bankrupt - First plaintiff's trustee in bankruptcy and defendant filed and obtained consent order that first plaintiff's objection to confiscation of frozen property be dismissed - Challenge by first plaintiff to consent order - Whether consent order made ex parte - Whether first plaintiff's trustee in bankruptcy can elect to discontinue proceeding involving objection to confiscation of frozen property
Legislation:
Bankruptcy Act 1966 (Cth) s 60, s 60(1)(b), s 60(2), s 60(3), s 60(4A), s 60(5)
Criminal Property Confiscation Act 2000 (WA) s 7(1), s 7(2), s 79, s 102(1)
District Court Rules 2005 (WA) r 6(1)
Rules of the Supreme Court 1971 (WA) O 43, r 16, O 58 r 23
Result:
Order dismissing first plaintiff's objection to confiscation of frozen property by freezing notice No WAPFN 130016 was not made ex parte
Application under O 58 r 23 of the Rules of the Supreme Court 1971 (WA) to set aside order dismissed
Representation:
Counsel:
First Plaintiff : Mr E W L Greaves
Second Plaintiff : Mr E W L Greaves
Third Plaintiff : Mr E W L Greaves
Fourth Plaintiff : Mr E W L Greaves
Fifth Plaintiff : Mr E W L Greaves
Defendant : Mr T A Staples
Solicitors:
First Plaintiff : Smith Leonard Fahey Lawyers
Second Plaintiff : Smith Leonard Fahey Lawyers
Third Plaintiff : Smith Leonard Fahey Lawyers
Fourth Plaintiff : Smith Leonard Fahey Lawyers
Fifth Plaintiff : Smith Leonard Fahey Lawyers
Defendant : Director of Public Prosecutions
Case(s) referred to in judgment(s):
City of Kwinana v Lamont [2014] WASCA 112
Kotrlik v Eisner [1958] VR 55
Redwin Industries Pty Ltd v Feetsafe Pty Ltd [2002] VSC 427
Yap v Bailiff [2006] WADC 119
- PARRY DCJ:
Introduction
1 Mr Redwan Jebara (first plaintiff) seeks an order, pursuant to O 58 r 23 of the Rules of the Supreme Court 1971 (WA) (RSC)(which applies in this court in consequence of r 6(1) of the District Court Rules 2005 (WA)), setting aside the following 'consent orders' made by the court on 21 April 2016 pursuant to RSC O 43 r 16:
1. The first plaintiff's objection to the confiscation of frozen property by freezing notice numbered WAPFN 130016 be dismissed.
2. There be no order as to costs as between the first plaintiff and the defendant in respect of the proceedings, including this application.
2 RSC O 58 r 23 states as follows:
The Court may set aside any order which has been made ex parte.
Background
3 This proceeding was commenced by an originating summons filed by the first plaintiff on 26 February 2013 objecting, pursuant to s 79 of the Criminal Property Confiscation Act 2000 (WA) (CPC Act), to the confiscation of frozen property, namely a cash amount of $421,485, by freezing notice No WAPFN 130016. Objections to the confiscation of the frozen property were also subsequently filed in the proceeding by Mr Hussein Jebara, Mr Ali Jebara, Ms Ruba Jebara and Ms Rabha Jebara, the second, third, fourth and fifth plaintiffs, respectively. On 13 January 2015, the proceeding was expanded by consent to also include objections, pursuant to s 79 of the CPC Act, to the confiscation of frozen property by freezing notice No WAPFN 140164, by each of the first to fifth plaintiffs.
4 If the first plaintiff had not filed an objection to the confiscation of the frozen property by freezing notice No WAPFN 130016, then, as stated in s 7(1) of the CPC Act, the '[f]rozen property is confiscated'. Furthermore, under s 7(2) of the CPC Act, if each objection to the confiscation of the frozen property is 'finally determined' and 'the freezing notice is not cancelled or set aside', then 'the property is confiscated'.
5 On 12 November 2015, the first plaintiff was declared bankrupt on his own petition and the Official Trustee in Bankruptcy became trustee of his bankrupt estate.
6 On 18 April 2016, the Official Trustee in Bankruptcy and the solicitors for the defendant in the proceeding, the State of Western Australia, filed a memorandum of consent orders seeking the orders that were made by the court on 21 April 2016, pursuant to RSC O 43 r 16, which are now challenged by the first plaintiff.
Issue for determination
7 The principal issue for determination in relation to the first plaintiff's challenge to the orders made on 21 April 2016 is whether, as the first plaintiff contends, but the defendant disputes, those orders were in fact made 'ex parte'.
8 An order is made ex parte if it is made 'in the absence of one party' (Kotrlik v Eisner [1958] VR 55, 57 (Herring CJ)) and without notice to that party (Redwin Industries Pty Ltd v Feetsafe Pty Ltd [2002] VSC 427 [11] (Habersberger J)).
9 The first plaintiff submits that the orders were made ex parte, because they were made in his absence and without notice to him. In contrast, the defendant submits that the orders were not made ex parte, because they were made 'on notice to, and with the consent of, the only person who had authority to prosecute or discontinue the action pursuant to s 60(2) of the Bankruptcy Act 1966, namely the trustee in bankruptcy'.
10 The determination of this issue turns on the proper interpretation of s 60, and in particular subsection (4A), of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act).
Were the orders made ex parte?
11 Section 60 of the Bankruptcy Act states, in part, as follows:
(1) The Court may, at any time after the presentation of a petition, upon such terms and conditions as it thinks fit:
…
(b) stay any legal process, whether civil or criminal and whether instituted before or after the commencement of this subsection, against the person or property of the debtor:
(i) in respect of the non-payment of a provable debt or of a pecuniary penalty payable in consequence of the non-payment of a provable debt; or
…
(3) If the trustee does not make such an election within 28 days after notice of the action is served upon him or her by a defendant or other party to the action, he or she shall be deemed to have abandoned the action.
…
(4A) Notwithstanding paragraph (1)(b), this section does not empower the Court to stay any proceedings under a proceeds of crime law.
(5) In this section, action means any civil proceeding, whether at law or in equity.
12 As noted earlier, the defendant submits that the orders made on 21 April 2016 were not made ex parte, because they were made 'on notice to, and with the consent of, the only person who had authority to prosecute or discontinue the action pursuant to s 60(2) of the Bankruptcy Act 1966, namely the trustee in bankruptcy'.
13 It is common ground, and plainly the case, that this proceeding is an 'action', as that term is defined in s 60(5) of the Bankruptcy Act for the purposes of s 60 of that Act, as it is a 'civil proceeding'. In this regard, s 102(1) of the CPC Act states that '[p]roceedings on an application under this Act are taken to be civil proceedings for all purposes'.
14 It is also common ground, and I find, that by executing the memorandum of consent orders seeking the orders that were made on 21 April 2016, the Official Trustee in Bankruptcy, in effect, elected, in writing, to discontinue the action insofar as it involves the first plaintiff's objection to the confiscation of frozen property by freezing notice No WAPFN 130016.
15 As noted earlier, s 60(2) of the Bankruptcy Act states as follows:
An action commenced by a person who subsequently becomes a bankrupt is, upon his or her becoming a bankrupt, stayed until the trustee makes election, in writing, to prosecute or discontinue the action.
16 However, the first plaintiff submits that the Official Trustee in Bankruptcy could not lawfully elect, pursuant to s 60(2) of the Bankruptcy Act, to discontinue the action that the first plaintiff commenced in this proceeding, because, on its proper interpretation, 'subsection (4A) [of s 60] is a carve-out of the entire general operation of section 60, including a carve-out of section 60(2)' of the Bankruptcy Act (ts 42.4).
17 Mr E W L Greaves, counsel for the plaintiffs, acknowledges that the first plaintiff's proposed interpretation of s 60(4A) of the Bankruptcy Actis inconsistent with 'a literal textual reading of s 60', both because s 60(4A) expressly states that it (only) operates '[n]otwithstanding paragraph (1)(b) [of s 60]' (and the first plaintiff concedes that his objection, by way of summons, to the freezing notice is not a 'legal process … against the person or property of the debtor', within the meaning of s 60(1)(b) of the Bankruptcy Act (ts 40.3)), and because subsection (4A) does not refer at all to subsection (2) of s 60 of the Bankruptcy Act. However, the first plaintiff submits that 'a literal textual reading of s 60' does not reflect 'the true meaning of s 60' in this respect, because:
By sub-section 4A the policy of the Bankruptcy Act is clear: proceeds of crime proceedings are not affected by bankruptcy.
18 The first plaintiff submits that the CPC Act 'is unique within the class of proceeds of crime laws in the way its procedures operate', because whereas in each other State and under federal law, when an authority seeks confiscation of property, the authority must apply to a court for an appropriate order, under the CPC Act, the authority:
applies to a Justice of the Peace [under s 34] and the onus is then on the owner of the property to commence proceedings before a competent Court by way of objection to confiscation [under s 79].
Thus, in each other jurisdiction, a proceeding under a proceeds of crime law, will be commenced by the authority against the bankrupt, but that is not the case under the [CPC] Act.
19 Mr Greaves summarised the first plaintiff's submission in relation to the proper interpretation of s 60(4A) of the Bankruptcy Actas follows:
And I say quite frankly it is necessary to engage in some re-drafting. I accept that I'm setting myself a very high bar here. The plain English and unambiguous text of subsection (4A) is against me; I accept that. But it results – the plain English results certainly in an outcome that does not fit with the combined scheme of the Federal Proceeds of Crime Act and the Bankruptcy Act. And indeed, I would go so far as to borrow the relevant language of the Acts Interpretation Act, section 15AB, as it results in an absurdity.
The submission, and the only submission, that I can advance, is that the plain reading of subsection (4A) cannot be the correct meaning. (ts 40.8 - 41.2)
20 In my view, the first plaintiff's proposed interpretation of s 60, and in particular subsection (4A), of the Bankruptcy Act is incorrect, for the following reasons.
21 As the Court of Appeal held in City of Kwinana v Lamont [2014] WASCA 112 [47]:
The High Court of Australia has iterated, and reiterated, that the starting point and ending point for the task of statutory construction is the statutory text. The context, including legislative history and extrinsic materials, has utility only to the extent that it assists in fixing the meaning of the statutory text: Thiess v Collector of Customs [2014] HCA 12 [22] (the court); Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 87 ALJR 98, 107 [39] (the court); Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27, 46 - 47 [47] (Hayne, Heydon, Crennan & Kiefel JJ). The duty of a court is to give the words of the statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, but not universally, that meaning will correspond with the grammatical meaning of the provision: Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 [78].
22 The 'starting point and ending point for the task of statutory construction … [namely,] the statutory text' is clear and unambiguous in this case. By its words prior to the comma, subsection (4A) expressly qualifies (and qualifies only) subsection (1)(b). Section 60(4A) does not purport to qualify or exclude any authority under s 60(2) (or under s 60(3)) of the Bankruptcy Act.
23 Furthermore, although, as the Court of Appeal recognised in City of Kwinana v Lamont, context, including legislative history and extrinsic materials, have utility 'to the extent that it assists in fixing the meaning of the statutory text', the extrinsic materials referred to by the first plaintiff, namely the explanatory memorandum to an amending Bill which amended s 60(4A) in 2002 and the Australian Law Reform Commission Report Confiscation that Counts: A Review of the Proceeds of Crime Act 1987 (Report 87, 30 June 1999) which was referred to in the explanatory memorandum, do not warrant an interpretation of s 60(4A) under which its meaning excludes authority of a trustee in bankruptcy under s 60(2) to consent to the dismissal by the court of a bankrupt's objection to the confiscation of frozen property.
24 The explanatory memorandum states that the amendment is '[c]onsistent with the recommendation of the Australian Law Reform Commission [that] proceeds of crime proceedings will normally take precedence over those other proceedings'. The Australian Law Reform Commission report states at [6.52] that 'the Commission is firmly of the view' that the Proceeds of Crime Act 1987 (Cth) 'should prevail over the Bankruptcy Act and the Family Law Act in all cases where proceedings under the [Proceeds of Crime] Act have been commenced – usually by an application for a restraining order'. The extrinsic materials relied on by the first plaintiff do not refer to or even appear to contemplate a proceeding comprising an objection to the confiscation of frozen property under a freezing notice and what should occur if the plaintiff in such a proceeding becomes bankrupt and the plaintiff's trustee in bankruptcy elects to discontinue the proceeding.
25 The explanatory memorandum and the Australian Law Reform Commission report assist in fixing the meaning of s 60(4A) which is consistent with the grammatical meaning of the provision; that is, that notwithstanding the power of a court prescribed by s 60(1)(b) to stay any legal process against the person or property of the debtor, s 60 does not empower the court to stay any proceedings under a proceeds of crime law. The contemplation of both the text of s 60 and the extrinsic materials is that proceedings under a proceeds of crime law are brought by an authority against a person and, on its proper interpretation, the meaning of s 60(4A) is that the power of the court to order a stay of such proceedings where the person against whom such proceedings are brought becomes bankrupt is excluded. Neither the explanatory memorandum nor the Australian Law Reform Commission report warrant an interpretation that the legislative meaning of s 60(4A) of the Bankruptcy Act is that a proceeding objecting to the confiscation of frozen property by a freezing notice under the CPC Act cannot be stayed following the bankruptcy of the objector.
26 Furthermore, the evident purpose of s 60(4A), which is consistent with the grammatical meaning of the text, is to ensure that a person against whom an authority has brought a proceeds of crime proceeding cannot avoid that proceeding by means of bankruptcy. A purposive interpretation of s 60(4A) of the Bankruptcy Act,therefore, does not assist the first plaintiff in the circumstances of this case.
27 Furthermore, and in any case, even if one were to accept the first plaintiff's submission that 'the correct reading of section (4A) is that the substantive section of (4A) actually begins after the comma' (ts 40.3) (which I do not), the 'substantive section' excludes the power of the court 'to stay any proceedings under a proceeds of crime law' (emphasis added). The first order made on 21 April 2016 in this case was not a 'stay' of the proceeding. Rather, the order was a dismissal, by consent, of the proceeding, upon, in effect, an election by the first plaintiff's trustee in bankruptcy 'in writing, to … discontinue the action', within the meaning and by the authority of s 60(2) of the Bankruptcy Act. A dismissal upon discontinuance is not the same as a stay of a proceeding. Indeed, s 60(2) of the Bankruptcy Actexpressly distinguishes between a stay, on the one hand, and a discontinuance, on the other hand.
28 This court has also recognised the distinction between a stay, on the one hand, and a dismissal, on the other hand, of an action, in the context of a plaintiff having become bankrupt during the course of a proceeding. In Yap v Bailiff [2006] WADC 119, Macknay DCJ held at [42] – [43] as follows in relation to an application by a defendant for dismissal of a proceeding where the plaintiff had become bankrupt after the commencement of the proceeding:
42 It would seem clear from the authorities that the deemed abandonment by a trustee of an action has been regarded by courts in Australia as giving rise to a right in the other party to seek a dismissal of the action, and that there is a discretion in a court to grant such relief.
43 Alternatively, a stay can be granted.
29 In the circumstances of this case, there was a 'stay' of the first plaintiff's proceeding against the defendant with effect from 12 November 2015. However, this 'stay' occurred by operation of law, and in particular by operation of s 60(2) of the Bankruptcy Act ('An action commenced by a person who subsequently becomes a bankrupt is, upon his or her becoming a bankrupt, stayed …'), not by an order of the court. The order made on 21 April 2016 that the first plaintiff seeks to challenge was not a stay, but rather a dismissal of the proceedings. The dismissal occurred on the basis of, in effect, the election, in writing, of the first plaintiff's trustee in bankruptcy to discontinue the action, which was authorised by s 60(2) of the Bankruptcy Act, and the consent of the defendant to that course.
Conclusion
30 The first plaintiff's trustee in bankruptcy had authority under s 60(2) of the Bankruptcy Act to seek consent orders dismissing the first plaintiff's objection to the confiscation of frozen property by freezing notice No WAPFN 130016. On the proper interpretation of s 60(4A) of the Bankruptcy Act, that provision does not qualify or exclude the authority of a bankrupt plaintiff's trustee in bankruptcy under s 60(2) of the Bankruptcy Act to discontinue an action comprising an objection to the confiscation of frozen property under s 79 of the CPC Act, and therefore to apply for its dismissal by the court.
31 It follows that the orders made by the court on 21 April 2016, by consent of the first plaintiff's trustee in bankruptcy and the defendant, were not, relevantly, made ex parte, because they were made on the application of the only person who had authority to prosecute or discontinue the first plaintiff's action pursuant to s 60(2) of the Bankruptcy Act, namely his trustee in bankruptcy, and the other party to the action, namely the defendant.
32 As the orders sought to be challenged under RSC O 58 r 23 were not made ex parte, the application to set aside those orders under that rule must be dismissed.
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